An investor has been accused of operating a
Ponzi schemeworth approximately $100 million. The investment scam involved more than
350 unsuspecting investors.
Michael S. Goldberg has pleaded guilty to three counts of wire fraud involving
a diamond scam, according to David B. Fein, U.S. attorney for the District
of Connecticut and Kimberly K. Mertz, special agent of the New Haven division
of the FBI.
Mr. Goldberg allegedly solicited investors to invest in diamond contracts.
Investors were told that the money would be used to acquire diamonds at
extremely low prices from New York vendors and then immediately sold for
large profits. The investors were supposedly told that they would receive
a 20 to 25 percent return on their investments every 60 to 90 days.
Along with the diamond scam, other investors were apparently under the
impression that their money would be used to purchase distressed assets
from JP Morgan Chase Bank. Investors were allegedly told that Mr. Goldberg
was given a contractual right to purchase foreclosed and seized business
assets from Chase.
According to the complaint, Goldberg used a portion of new funds to pay
returns to existing investors.
“Michael Goldberg’s actions have devastated the financial
security of hundreds of innocent investors,” said Agent Mertz.
Mr. Goldberg is scheduled for sentencing on December 2, 2010. He faces
up to 60 years in prison.